The State of Emerging Technology in the Enterprise

the ETS by

THOMAS DELVECCHIO | FOUNDER + CEO

SAGAR KADAKIA | CO-DIRECTOR of RESEARCH VINCENT CHANG | SENIOR DATA SCIENTIST

For corporate access, contact | [email protected] For institutional investor access, contact | [email protected] OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For press inquiries, contact | [email protected] Emerging CIO Technology ANSWER Study the ETS by OPTIONS In this study, we’re not only capturing the enterprise appetite for emerging technology vendors across the global market, but we’re informing 4000+ IT decision

makers of which emerging companies they should be

evaluating and utilizing, providing the investment

community an unparalleled look into how their portfolio companies are performing in the enterprise, including

which established vendors their portfolio companies are impacting and potential acquirers, and educating the companies we track with key performance metrics impacting their sales funnel and product-market fit.

Representing $300 billion in annual IT spend, ~700 CIOs Currently Evaluating participated in this study, 229 of which are Global 2000 IT decision makers (ITDMs), and 66 of which are in the Aware of, NO Plan to Evaluate

Fortune 100. This study covers 318 technology Replaced or In Containment Evaluated, Plan to Utilize Evaluated, NO Plan to Utilize Allocating Further Plan to Evaluate within 6 months frameworks and products, making this the most comprehensive study on the market.

See more at etr.plus Organization plans to evaluate in the next 6 months Organization is aware of, but has no plans to evaluate Organization is currently evaluating Organization evaluated, plans to adopt Organization is currently using the vendor in production Organization evaluated, decided not to adopt Organization has replaced or intends to replace the vendor OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus Emerging Technology KPI 360° Table Companies to Keep an Eye On Performance Breakdown of Leading & Lagging Sales Pipeline Diagnostics Contents Companies by Sector with Consumer Driven Metrics Venture Technology Investor Company Potential Threats to Predictive Technology Incumbents Vendor Diagnostics M&A CMO

Delta Between Investment Institutional Product High Potential Capital and Enterprise Investor Development Acquisition Targets Traction

Leading Emerging Consensus KPI Ranking VC Portfolios based Technology Companies Blind Spots on Enterprise Traction

OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus ETS Leading Emerging Technology Companies

All 318 company datasets were standardized (using z-scores) and ranked, by percentile, based on Net Sentiment* and headcount. These companies and technologies are becoming pervasive across enterprise stacks.

99 99 98

97 Net Sentiment = [Plan to

Best Positioned

Evaluate within 6 months 95 95 in its Sector + Currently Evaluating + 94 94 Evaluated, Plan to Utilize + Allocating Further] -

[Evaluated, No Plan to

91 91 Utilize + Replaced or In

90 Containment]

85 85 84

Chef Slack

Zoom

GitLab Puppet Docker Confluent HashiCorp Anaconda Databricks JFrog

Kubernetes Cylance CrowdStrike Darktrace MapR Veeam CloudPassage Datadog WhiteHat Netskope Automation Anywhere MariaDB WSO2 Snowflake

OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus ETS Emerging Technology Companies to Keep an Eye On All 318 company datasets were standardized (using z-scores) and ranked, by percentile, based on Net Sentiment* and headcount. These companies, though not quite pervasive, are being evaluated and utilized at above average levels across the enterprise.

96 Best Positioned Net Sentiment = [Plan to Evaluate within 6 months

in its Sector + Currently Evaluating +

93 Evaluated, Plan to Utilize

92 + Allocating Further] -

91 [Evaluated, No Plan to

90 Utilize + Replaced or In

89 Containment]

87 87

84 83 83

82 82

80 80

75 75

Chef Chef

71 H2O.ai UiPath

InfluxData SigFox

WalkMe

Rancher Labs ZeroFOX Domino C3 IoT Octopus Deploy Digital Shadows DataRobot DivvyCloud Aporeto Tellmeplus WorkFusion Netwrix Artificial Solutions StackRox CloudBees Heptio Datawire Segment Odoo Aqua

OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus ETS Leading and Lagging Emerging Technology Companies by Sector

On the right, select Information sectors are displayed to Analytics demonstrate ETR’s Security capability in ranking and sorting emerging technologies based on enterprise traction.

The upper right corner represents companies with the highest Net Sentiment* among all customers and larger accounts.

The lower left corner represents companies Enterprise Infrastructure with the lowest Net Sentiment* among all Apps Software customers and larger GLOBAL 2000, FORBES PRIVATE 225, FEDERAL AGENCIES accounts.

Net Sentiment = [Plan to Evaluate within 6 months + Currently Evaluating + Evaluated, Plan to Utilize + Allocating Further] - [Evaluated, No

Plan to Utilize + Replaced or In NET SENTIMENT FROM Containment]. Net Sentiment combines almost all of our survey answer options to determine overall opportunity, traction, and back out any customer negativity. NET SENTIMENT FROM ALL CUSTOMERS

OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus ETS Potential Threats to Technology Incumbents Below, we provide a few examples for select companies where emerging technologies are being evaluated in shared customer accounts.

MapR Scale Computing Datadog

MongoDB Nutanix Splunk

Graylog MariaDB Pivot3

Redis Lab Atlantis Computing CrowdStrike MapR Cloudera Palo Alto + Networks Shared Customer Accounts Hortonworks Example: Among Pivot3 Darktrace Snowflake customers that are using Nutanix, 67% represent a *Near-Term Growth Opportunity = [Plan Near-Term Growth to Evaluate within 6 months + Currently NetSkope Evaluating + Evaluated, Plan to Utilize + Opportunity* for Pivot3 MemSQL Allocating Further]

ETR has built the ultimate M&A tool to screen for potential acquisition targets. Here’s what we did: emerging technologies were screened for Near-Term Growth Opportunities* in shared customer accounts. These acquisition targets are best positioned to (1) give the established vendor an upsell opportunity or (2) engage a new user base. Below, we’ve provided a few examples for select companies. Hashicorp

Google Microsoft

Puppet Anaconda

H20.ai

Twistlock CrowdStrike Cisco IBM Automation Anywhere NetSkope

WhiteHat *Near-Term Growth Opportunity = [Plan Security to Evaluate within 6 months + Currently Evaluating + Evaluated, Plan to Utilize + Allocating Further]

Growth Metrics & Financials Projections

Customer Feedback / Customer Anecdotes

Activation Rate / Awareness Levels

Conversion Rates / Churn Rates

Baseline Metrics

Near-Term Growth Opportunity = [Plan to Evaluate within 6 months + Currently Evaluating + Evaluated, Plan to Utilize + Allocating Further]. This metric combines positive

survey answer options to determine near-term customer growth opportunity. This metric looks at customer evaluations, utilization, and adoptions.

Evaluation-To-Utilization = [Plan to Evaluate within 6 months + Currently Evaluating] / [Evaluated, Plan to Utilize + Allocating Further]. Evaluation-To-Utilization is a ratio of a vendor’s near-term customer pipeline to their existing customer base. This ratio should be interpreted as a vendor’s potential to accelerate customer headcount.

CIO Mindshare = [Aware of, No Plan to Evaluate + Plan to Evaluate within 6 months + Currently Evaluating + Evaluated, Plan to Utilize + Allocating Further] / [Unique Sector Customer Count]. This percentage should be interpreted as the company’s pervasion within enterprises and the minds of IT decision makers versus peers.

Net Sentiment = [Plan to Evaluate within 6 months + Currently Evaluating + Evaluated, Plan to Utilize + Allocating Further] – [Evaluated, No Plan to Utilize + Replaced or In Containment]. This metric combines almost all of our survey answer options to determine overall opportunity, traction, as well back out any customer negativity. This metric aggregates customer awareness, evaluations, utilization, adoptions, and replacements.

Evaluation-To-No-Evaluation = [Plan to Evaluate within 6 months + Currently Evaluating] / [Aware of, No Plan to Evaluate]. Evaluation-To-No-Evaluation is a ratio of customers evaluating to those that are aware of the vendor and have decided not to evaluate. This ratio should be interpreted as a vendor’s ability to convert awareness into evaluations.

Conversion-To-Churn = [Evaluated, Plan to Utilize + Allocating Further] / [Evaluated, No Plan to Utilize + Replaced or In Containment]. Conversion-To-Churn is a ratio of a vendor’s existing customers to those that have walked away. This ratio should be interpreted as a vendor’s ability to retain customers post evaluation.

Churn-To-Evaluation = [Evaluated, No Plan to Utilize + Replaced or In Containment] / [Plan to Evaluate within 6 months + Currently Evaluating] Churn-To-Evaluation is a ratio of customers who have walked away vs potential customers. This ratio can be interpreted as whether a vendor is losing customers faster than their pipeline is bringing in potential Consumer Driven Metrics (ITDMs - Squared) customers.

OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus ETS KPI 360° Performance Breakdown Peer Groups were created by grouping vendors within comparable citation ranges into four equally-sized buckets: POC, Innovator, Scaling and Breakout. Percentile rankings were computed for every metric within each Peer Group. Leading and Lagging Innovator Peer Group vendors are listed below by metric .

Net Sentiment Near-Term Growth Opportunities Evaluation-To-Utilization

This metric combines almost all of our survey answer options to This metric combines positive survey answer options to determine Evaluation-To-Utilization is a ratio of a vendor’s near-term determine overall opportunity, traction, and backs out any near-term customer growth opportunity. This metric looks at customer pipeline to their existing customer base. This ratio customer negativity. This metric aggregates customer customer evaluations, utilization, and adoptions. should be interpreted as a vendor’s potential to accelerate awareness, evaluations, utilization, adoptions, and replacements. customer headcount.

Lagging Leading Lagging Leading Leading Lagging

Cumulus Networks Rancher Labs Cumulus Networks Rancher Labs Aqua Rancher Labs CircleCI WalkMe CircleCI WalkMe StackRox Rundeck Buguroo SigFox Acquia Graylog Buguroo Travis CI

Evaluation-To-No-Evaluation Churn-To-Evaluation Conversion-To-Churn Evaluation-To-No-Evaluation is a ratio of customers evaluating to Churn-To-Evaluation is a ratio of customers who have walked away vs Conversion-To-Churn is a ratio of a vendor’s existing customers to those that are aware of the vendor and have decided not to potential customers. This ratio can be interpreted as whether a vendor is those that have walked away. This ratio should be interpreted as a evaluate. This ratio should be interpreted as a vendor’s ability to losing customers faster than their pipeline is bringing in potential vendor’s ability to retain customers post evaluation. convert awareness into evaluations. customers.

Leading Lagging Leading Lagging Leading Lagging

SigFox Graylog Cumulus Networks Acquia Rancher Labs Buguroo StackRox Reltio Nasuni CFEngine Freshworks Cumulus Networks Freshworks WalkMe Egnyte CircleCI Walkme CircleCI

OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus ETS Sales Pipeline Diagnostics: Prospect, Qualify, Close, Retain

Metrics should be viewed holistically to determine which aspect(s) of sales and marketing are performing above and below average. We use three metrics from the prior slide to visually demonstrate our capability in dissecting the sales funnel for strengths and weaknesses. This type of analysis can be performed on all 318 datasets.

Evaluation-to-No-Evaluation Pipeline Performance Brackets

This ratio should be interpreted as a vendor’s Above Average ability to convert awareness into evaluations Awareness Awareness Conversion-to-Churn

This ratio should be interpreted as a vendor’s Average ability to retain customers post evaluation Evaluation

Evaluation-to-Utilization Below Churn Conversion Average This ratio should be interpreted as a vendor’s potential to accelerate customer headcount 1st-49th percentile 50-75th percentile 75th-99th percentile

OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus ETS Predictive Vendor Diagnostics: What’s Coming

Customer DNA - ETR can analyze and aggregate Track how the company’s awareness levels the vendor DNA of converted customers as well are changing based on recent marketing as those customers that decided not to adopt the initiatives, whether planned evaluations are product - e.g., company XYZ has a 75% trending up or down due to product road conversion rate among customers using Docker & map enhancements, and whether wallet- and Palo Alto Networks in their technology stack vs a

mind-share is increasing in the enterprise. 45% conversion rate among customers using VMware & Symantec.

ETS TSIS TSIS ETS NOV-DEC APR 2019 JUL 2019 NOV 2019 2018

TSIS ETS TSIS JAN 2019 MAY 2019 OCT 2019

Which Customers are Converting - ETR can Customer Conversion Time - identify the profile of customers that are Customer Conversion Rate - The amount of time between an converting from pilots to paid subscribers. For The number of customers evaluation indication in the ETS example, ETR can determine which IT decision that indicated an evaluation and a spending intention in the makers (by job title) have the highest conversion in the ETS that are now TSIS . rates - i.e., which technology end-users should the indicating a spending company be targeting at each corporation. intention in the TSIS.

OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus ETS Delta Between Investment Capital and Enterprise Traction

Our models are built to identify opportunities 60% based on the disparity that often occurs between

Container the consensus market opinion and the truth. ML / AI Orchestration Robotic Process Automation We demonstrate here the disparity between 50% investment capital trends (consensus) and resultant enterprise traction (truth) in emerging technology companies. The positioning of the Infrastructure Software Container sectors below is based on the number of 40% Enterprise Apps Platforms IOT unique sector customers (x axis) and sector Net Diversified Apps

Sentiment* (y axis). The size of the sector Data indicates the average total raised for the Warehousing Productivity Apps emerging technologies in that sector. 30%

Virtualization Information Networking Security Robotic Process Automation (RPA) and Video Analytics / BI /

SECTOR NET SENTIMENT Conferencing both stand out as sectors where ECM Big Data 20% Storage the average capital investment is relatively high but the enterprise traction and/or Internet Cloud Computing / Video sentiment is relatively low. Here, capital Marketing / Managed Hosting Conferencing investment is not directly correlated with 10% Social Media enterprise traction. On the other hand, Container Platforms, Infrastructure Software (API CUSTOMERS Management, Automation, Cloud/Data 50 100 150 200 250 300 350 400 450 500 Management, Stream Processing, etc.) and Information Security are screening as sectors Another way to interpret the visual: CIOs are more likely to evaluate (and utilize) emerging

where average investment capital is relatively technologies in ML / AI, Enterprise Apps, Data Warehousing, Analytics, Container Platforms, Container

low but enterprise traction + sentiment is high. Orchestration, Information Security and Infrastructure Software. Investment allocation should be aligned with the needs of CIOs and greenfield opportunities in the enterprise.

Net Sentiment = [Plan to Evaluate within 6 months + Currently Evaluating + Evaluated, Plan to Utilize + Allocating Further] - [Evaluated, No Plan to Utilize + Replaced or In Containment] OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus VC rankings.

OPINIONS ONLY EXIST DUE TO A LACK OF DATA Copyright © 2018 Aptiviti Inc. - Confidential & Proprietary For access, contact | [email protected] | or visit etr.plus ETS Ranking VC Portfolios based on Enterprise Traction Top 20 Venture & Angel Investors

Not only are we making our community aware of which emerging companies they should be evaluating and/or utilizing, but we're also helping emerging technology companies understand which venture investors might be most suitable for them to work with based on the success the VCs have had in helping their enterprise technology portfolio companies gain awareness, evaluations and traction in the enterprise. 99 99 98 98 Each venture investor was assigned a score and ranked, by percentile, based on the performance (determined by Net Sentiment*) of their portfolio holdings in 97 97 ETR's Emerging Technology Study (ETS). The score was based on awareness, evaluation, utilization, and replacement metrics from ~700 enterprise CIOs and 96 96 other high-level IT decision makers. 95 95 95 94 94 93 93

92 92

91 91 91

Jerry Yang Kima Ventures Ronald Conway

*Net Sentiment = Matthew Ocko [Plan to Evaluate Trinity Ventures Y Combinator Lowercase Capital within 6 months + AME Cloud Ventures Azure Capital Partners FundersClub Ignition Partners SV Angel

Currently Evaluating SharesPost + Evaluated, Plan to Kenny Van Zant Greylock Partners

Utilize + Allocating 500 Startups Benchmark Capital Sequoia Capital Further] - MSD Capital [Evaluated, No Plan to Utilize + Replaced or In Containment] Greenspring Associates

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